Thanks for coming! I plan to post a lot of interesting articles and comment on a wide range of things-- from political to religious, from private to public, from formal writing on public policy to snippets on random observations.

Thursday, January 14, 2016

the tragedy of repair-free cars

See also: what if we had free energy (and appropriate policies to deal with its pollution)?
__________________________________The Tragedy of Repair-Free Cars

Imagine a world where cars no longer
require repairs and maintenance. Would this be good for the economy and society?

For individuals and the economy, the costs of this improvement are obvious.
Producers of auto parts and engine fluids would go bankrupt, with job losses
and investment failures. Service providers of oil changes and timing belts
would be out of work. This would be difficult for these folks, especially if
they could not easily move into a job field that used their skills. With
industries disappearing, towns and even regions would face tough times if they
depend on these industries.

The benefits to consumers are
obvious: less time and money on repairs and maintenance. Wouldn’t
this be awesome?! The benefits to the
economy are relatively obvious, but difficult to quantify: the freed-up time
and money would be used for other beneficial and profitable activities.

How do we decide how to weigh these costs and benefits? The first question
is ethical: When do we have the right to prevent advances in technology?
(Rarely.) The second question is practical: What are the effects of the advance
in technology-- or in contrast, efforts to restrict it using government? In his book, Fair Play, Steve Landsburg relates a parable developed
by another professor. An entrepreneur developed a new way of making low-cost,
high-quality cars. He built a facility on the West Coast, kept his process
secret, and started to turn grain into cars. Consumers were thrilled with the
improvements. Farmers were ecstatic at the increased demand for their grain,
even when used as an input for cars. Things were tough for our auto industry,
but most people recognized that technological progress, always accompanied by
growing pains, is a good thing on net.Eventually, an investigative reporter figured out the entrepreneur's secret.
The factory is an empty building with the back door leading to a shipping dock.
Grain came in the front door; it went out the back door; and it was sent to
foreign countries in exchange for cars. Well, as you might imagine, the
revelation turned the popular perception of the entrepreneur from hero to
villain.As Landsburg puts it: "The moral, of course, is that inexpensive cars
are a good thing, and equally a good thing whether we acquire them with
technology or by trade. Cutting off trade is exactly like closing the most
efficient factories."The parable can be extended to other areas. Imagine if people suddenly had
perfect health until they died. No more health care! Tough on health care
providers; great for consumers; and overall, good for the economy. Imagine if
all people suddenly knew economics well. Tough on economics professors; great
for people; and overall, good for the economy.

Usually, in real life, the effects
are more modest than repair-free cars or repair-free bodies. But the same analysis
holds true for international trade, technological advance, and immigration of workers.
More competition is good for buyers; tough for sellers; and good for society as
a whole.

The flip side of this is that politics
can be a potentially-attractive strategy to restrict competition. In India,
small textile operators have been able to limit large textile companies—in the
name of protecting inefficient, family production. In the 1930s, Ma & Pa grocery
stores in the U.S. wanted a special tax on larger grocery stores to restrict their competition.
In the U.S. today, wealthy sugar farmers use the government to enrich
themselves and lock out foreign competition. And so on. And so on.

If I can limit competition,
consumers are unlikely to see or imagine the benefits they’re missing. And I gain
by having more market share, higher profits, more job security, and so on—whether
in K-12 education, international trade, farm policy, or labor markets. Repair-free
cars may not be in our near-future. But policy reforms that would reach the
same ends are available to us—if our politicians have the wisdom and the
courage to implement them.

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About Me

First and foremost, I am saved by God's grace as manifested most clearly through the atoning death of Jesus Christ-- and thus, adopted into His family. As a result, I increasingly seek to extend His grace to others in my daily life. On the home front, I am a husband and father to four young men (two by adoption and two the more conventional way). Professionally, I am an economist who loves to teach and is active in public policy circles. Vocationally, I am an active writer and the author of three books (one on the book of Joshua; two on public policy-- one secular, one Christian). Finally, I am the co-author of a 21-month discipleship curriculum, Thoroughly Equipped (and a lighter 36-week version), for developing competent lay-leaders in the Church. Related to that work, Kurt and I have two books, Enough Horses in the Barn and Roll Up Your Sleeves.